Car sales tipped to rev up again

Australian new vehicle sales have held up despite the end of stimulus spending and tax breaks last year, and there was only a slight drop in monthly sales in January.

Official VFACTS data shows that sales of new passenger cars, sports utilities and commercial vehicles dropped by 1.7 per cent to 73,584 in January against the same month last year.

But overall national sales were dragged down by a plunge in Queensland, where new vehicle sales fell from 15,253 to 13,300, a fall of almost 13 per cent, as a result of the floods in the state’s south.

The Federal Chamber of Automotive Industries argues the industry is off to a solid start for the year, with sales in Queensland poised to recover, partly through the processing of insurance claims.

“We can expect sales in Queensland to be slower in the short term but will pick up in the months ahead as people begin to look for replacement vehicles," FCAI chief executive
Andrew McKellar
said.

Across the nation, sales to private buyers were up almost 14 per cent during the month, while business purchases declined.

Toyota maintained the biggest market share, with just over 20 per cent, followed by GM Holden with 11.4 per cent. Mazda had a 9.8 per cent share while Ford and Hyundai shared fourth position with 8.7 per cent each. Vehicle sales outperformed the broader economy, posting their second highest annual sales figure. It was also the third time more than 1 million units had been sold annually.

The strength of the Australian dollar has been a boost for buyers of imported vehicles, although it has added to pressure on export sales of locally made cars.

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GM Holden is looking to get a boost from selling an Australian-made four-cylinder car, the Cruze, which is currently imported from Korea. The locally produced model is due to go on sale next month.

Ford has denied that a final decision has been made on the future of the Falcon. But further speculation emerged from the Detroit motor show last month that it would eventually be replaced by a front-wheel or all-wheel-drive model based on an international design.

The Gillard government has decided to scrap the $400 million “cash for clunkers" scheme to help pay for flood reconstruction. The decision had been expected but local car makers – Toyota, Holden and Ford – are still reeling from a decision to also close the government’s $900 million green car innovation fund from January.